Jonathan Lane, ADM Agriculture’s head of grain trading, comments on the wheat market

Despite the sharp sell-off in US commodities midweek, US wheat still managed to post a weekly rise of $17/t thanks to news of an Indian wheat export ban last Saturday that had pushed markets sharply higher.

The sell-off was linked to talk of higher Russian wheat output, rumours of a possible Ukrainian export corridor and concerns over global inflation and economic slow-down.

EU and UK new crop prices have also firmed week on week, moving up €17/t and £7/t respectively, supported by firmer global markets and continued talk of crop stress due to the recent hot spell across much of western Europe.

French farm office AgriMer reported that the share of France’s soft wheat crop rated in good or very good condition slipped to 82% for the week ending 9 May.

India’s government has eased some export curbs, stating that consignments handed over to customs for examination and registered on or before 13 May would be allowed to be exported.

In addition, Egypt’s government has agreed to buy 500,000t of wheat from India, as the introduced export ban does not apply to deals reached between governments.

Morocco is set to import up to 4 mln t of soft wheat over the next 12 months and is looking at supplies from eastern European origins due to US prices being too expensive.

Ukrainian farmers had sown about 8.6 mln ha of spring crops as of 9 May, compared with about 11.4 mln ha last year.

Western Australia’s grain belt is off to a very good start, with most regions having good subsoil moisture and sown crops receiving recent beneficial rains.

CONAB expects Brazilian farmers to plant 16.3 mln ha of winter corn in 2021/22, with production estimated at 87.7 mln t, up 44%, as yields recover from last season’s drought-hit crop.

CONAB sees Brazilian wheat output for 2022/23 at 8.13 mln t due to a 6% year on year expanded area and higher yields, with imports projected at 6.5 mln t and exports at 1 mln t.

However, Buenos Aires Grains Exchange reports that Argentina is expected to produce a 20.5 mln t wheat crop in 2022/23, down from 22.4 mln t year on year, due to a contraction in the planted area.

Egypt plans to expand agricultural land under cultivation, incentivising farmers to increase land productivity by 15-20% this season, with an aim to raise self-sufficiency in wheat production to 65% by 2025.

Will Ringrose, ADM Agriculture’s head of oilseeds, comments on the OSR market

Until recently CBOT soybean prices have been largely supported by talks of higher US crush figures and stronger export demand for the end of the season.

US soybean plantings were up 18% on the week to 30%, but remain behind the five-year average.

China is reported to have purchased several cargoes of US and Brazilian soybeans over the past few weeks. The trade estimates Chinese soybean imports at 94 mln t against USDA’s 92 mln t.

In South America, Buenos Aires Grains Exchange estimates the Argentinian soybean harvest at 64.9% complete, compared with 70.6% last year and a 76.1% five-year average. Crop conditions were reported at 67.4% fair/excellent. BAGE left production unchanged at 42.0 mln t, down from 43.1 mln t last year.

Harvest in Brazil is drawing to a close and export premiums are beginning to rise as buyers try to tempt the last of the crop out from long holders. Soybean exports out are seen at 11.5 mln t for May versus 15.5 mln t last May.

Crude oil prices rallied to recent highs before dropping sharply on Wednesday. Values were pressured by news of a new Covid variant that might put a stop to easing of lockdowns in China, along with the prospect of a global recession.

Malaysian palm oil prices dipped from highs with demand and imports seen to be declining. However, the ongoing lack of sun-oil and higher biofuel usage in the US are likely to provide some underlying support.

Canadian canola closed $10 higher on Friday following soybeans. The weather remains a concern, being cold and wet in some areas and very dry in others. Parts of Saskatchewan finally received some rain, which will help sowing. More rain is forecast over the next week. China finally removed restrictions on Canadian canola imports enforced over three years ago.

Last week’s USDA report estimated world rapeseed production at 100.5 mln t (+10%). It put Canada’s output at 20 mln t versus 20.90 mln t from Stats Can.

MATIF rapeseed traded close to contract highs once again. But rumours of biofuel mandates being amended pressured prices, whilst equally a lack of rain is reducing EU crop potential. Prices fell sharply midweek (€40) following outside markets.

Sterling weakened with UK inflation at highs, trading yesterday at 1.18000, which offered some support.